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The new product has a six-year term and is based upon the Halifax Price index.

It offers full capital protection regardless of index movements. If the index rises during the term, investors will received the index return plus 30 per cent, with no upper limit.

If the index falls but remains above the 70 per cent cut-off point, investors receive an extra 30 per cent on the decline.

Minimum investment for the product is £3600, with interest of 4 per cent a year from receipt of cleared funds up to the investment date. IFA commission is 3 per cent.

Christopher Powell, head of product development at Arc, said, "Clearly the short-term view of the residential market is quite gloomy and it is predicted that it might go down by some 15 per cent or so during the coming 12 months.

“But once the lenders have refinanced, we believe that the mortgage market will become more friendly to borrowers. In addition, there is clearly a strong underlying demand for residential property, which is not being fulfilled."